Chunghwa mulls broadband and 3G investment in China

Chunghwa Telecom Co (中華電信) is mulling an investment in China's broadband Internet and third-generation mobile services, the company chairman has said.

China is expected to open its telecommunications market to foreign investors to meet its requirements as a new member of the WTO. Beijing is also expected to award third-generation, or 3G, licenses to foreign firms next year.

Taiwan now bans infrastructural investments by Taiwanese telecom companies in China, but can be expected to relax the restrictions under pressure by businesses hoping to cash in on the massive business opportunities in China ahead of the 2008 Beijing Olympics games, said Hochen Tan (賀陳旦), who heads Chunghwa Telecom, Taiwan's sole integrated telecom company.

"We want to invest in telecom infrastructure in China, like delivering broadband, and may set up joint ventures or invest directly in local operators," he said in an interview on Wednesday with the Dow Jones Newswires.

"An experienced operator like us can also provide technical support for 3G," he said.

Taiwan's government has a 35.6 percent stake in Chunghwa.

Hochen said Chunghwa Telecom's board will finalize an investment budget for next year in December, which will include funds for various investments as well as mergers and acquisitions. He declined to give specific details.

Chunghwa Telecom provides roaming services in China, but next year it will cooperate with China Telecom Corp (中國電信) -- China's largest fixed-line operator by subscribers -- to allow its Chinese subscribers to access Chunghwa's Hinet Web site.

This could help Chunghwa retain its business customers and maintain relationships with Chinese carriers, Hochen said.

Meanwhile, Hochen said a long-awaited move to reduce the company's capital is ``highly likely'' to happen next year.

Analysts have been urging Chunghwa Telecom for years to return excess capital to shareholders to improve returns.